Ophelia O'Brien, VP of Consumer Credit of American First Banks $\alpha$

Multiple Choice

Ophelia O'Brien, VP of Consumer Credit of American First Banks (AFB) , monitors the default rate on personal loans at the AFB member banks.One of her standards is "no more than 5% of personal loans should be in default." On each Friday, the default rate is calculated for a sample of 500 personal loans.Last Friday's sample contained 38 defaulted loans.Using $\alpha$ = 0.10, the appropriate decision is to _______.

A) reduce the sample size
B) increase the sample size
C) reject the null hypothesis
D) fail to reject the null hypothesis
E) do nothing